NICOSIA,
Cyprus — In
the breakaway statelet of
northern Cyprus, people are grappling with a perfect
economic storm – spiking global commodity prices, hobbled tourism and, above
all, the fallout from Turkey’s financial crisis.
اضافة اعلان
“Everything has become more expensive –
bread, milk, water, electricity bills,” sighed Mehmet Cobe, a tailor in the
self-declared
Turkish Republic of Northern Cyprus (TRNC).
Covering the northern third of the
Mediterranean island, the tiny territory declared itself a state in 1983, nine
years after Turkey invaded in response to a coup engineered by Athens that
sought to annex the island to Greece.
The so-called TRNC remains recognized only by
Turkey, leaving the 300,000 residents highly dependent on the largesse – and
fortunes – of
Ankara.
On top of that, coronavirus restrictions have
hit the crucial tourism industry which lures visitors with seaside resorts and
casinos.
Turkey itself has been battered by a currency
crisis that saw the lira lose nearly half its value against the dollar last
year, as President
Recep Tayyip Erdogan demanded interest rate cuts to spur
growth, even while inflation shot up.
The lira’s slide, alongside surging global
energy and food prices, sent inflation in northern Cyprus skyrocketing to 46
percent last year.
“Two days after receiving my salary, I’m left
with nothing,” said a hotel worker who asked not to be named.
Despite holding down jobs at two separate
hotels, the 6,000 lira she brings home each month is now equivalent to barely
430 dollars, the worker said, leaving her dependent financially on her grown-up
children.
TRNC Prime Minister Faiz Sucuoglu said last
week the economy was a “priority” for his government, a coalition of right-wing
nationalists who want outright secession from Cyprus.
After the economy contracted by 16.2 percent
in 2020, output last year “continued to fall”, Deniz said, drawing on estimates
for 2021 that are yet to be finalized.
The dependence of northern
Cyprus on Turkey
is stark, because no other country recognizes the breakaway entity.
“The TRNC can only sign agreements with
Turkey,” which funds 15 percent of the budget, said Deniz. Other sources
indicate that the statelet depends on Ankara for up to a third of its spending.
Northern Cyprus is an “aid-dependent
economy”, said Mustafa Besim, an economist at the publicly funded Eastern
Mediterranean University in Famagusta.
“The only source of external funding for
Turkish Cypriots is financial support from Turkey,” which provides an annual
package, he added.
But only half of the amount promised for 2021
was delivered, owing to “the economic problems in Turkey”, leaving
infrastructure projects and businesses short of money they had counted on,
Besim said.
The TRNC has watched on powerlessly from the
sidelines as Turkey’s central bank has taken policy decisions that put the lira
into freefall.
The Turkish currency “is a parameter that we
can’t control”, said Vargin Varer, managing director of freight transport
company Armen Shipping.
It “is controlled by the Turkish government –
or even the Turkish president, we should say”, he said.
The plunge in the value of the lira has made imports,
upon which the TRNC is enormously dependent, much more expensive.
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